Why in news?

US Commerce Secretary Howard Lutnick criticised India’s trade practices, singling out its refusal to import American corn. He argued that India maintains high tariffs while enjoying access to the US market, making the trade relationship “one way.”

Lutnick said India, despite its 1.4 billion population, does not buy even minimal US corn, calling it unfair and contrary to the US vision of “fair and reciprocal trade.”

What’s in Today’s Article?

• Why India Limits US Corn Imports
• US Corn Export Push Amid China’s Retreat
• India’s Rising Corn Demand and US Trade Hurdles
• Current Outlook

Why India Limits US Corn Imports?

• In 2024–25, India imported 0.97 million tonnes of corn, mainly from Myanmar (0.53 mt) and Ukraine (0.39 mt), while imports from the US were negligible at just 1,100 tonnes.
• Two key factors explain this:
  • India caps duty at 15% for up to 0.5 mt of imports, but any quantity beyond that faces a steep 50% tariff; and
  • it bans genetically modified (GMO) corn, which dominates US production.
• Also, India is the fifth-largest corn producer and largely self-sufficient, with production dominated by small farmers needing protection from corporate imports.
• These restrictions frustrate the US, the world’s largest corn producer and exporter.
  • US produced 377.63 mt and exported 71.70 mt in 2024–25 for uses ranging from livestock feed to ethanol production.

US Corn Export Push Amid China’s Retreat

• For 2025–26, US corn production and exports are projected at record highs of 427.1 mt and 75 mt, with most output from Midwestern states like Iowa, Illinois, and Nebraska.
• The urgency to find new markets is driven by collapsing Chinese demand.
• In 2022, China was the top buyer, purchasing $5.21 billion worth of US corn out of $18.57 billion in total exports.
• By 2024, exports dropped to $13.70 billion, with China slashing imports to $331 million, far behind Mexico ($5.51 billion), Japan ($2.73 billion), and Colombia ($1.52 billion).
• Between January–July 2025, amid escalating trade tensions, China imported only $2.4 million worth of US corn.
• This steep decline explains the Trump administration’s aggressive push, reflected in Commerce Secretary Howard Lutnick’s criticism of India’s trade restrictions.

India’s Rising Corn Demand and US Trade Hurdles

• India’s growing population, higher per capita GDP, and rising consumption of milk, eggs, fish, and meat are expected to sharply increase corn demand.
• The US Department of Agriculture projects India’s corn consumption to rise from 34.7 mt in 2022–23 to 98 mt in 2040 and 200.2 mt in 2050 under rapid income growth, requiring imports of 46 mt and 134 mt, respectively.
  • Even with moderate growth, consumption could reach 93 mt by 2050, with 26 mt of imports.
• The US, the world’s cheapest corn producer, is keen to tap this market, but 94% of its corn area is under genetically modified (GM) varieties, which India neither imports nor allows farmers to plant.
• While a NITI Aayog proposal once suggested importing GM maize solely for ethanol production, it was withdrawn.

Current Outlook

• Despite US pressure, India remains firm on protecting its farmers and food policies by rejecting GM corn and maintaining tariffs.
• With assembly elections in Bihar, India’s third-largest maize producer (after Karnataka and Madhya Pradesh), the government is even less likely to relax tariffs or permit GM corn imports.
• Price differences add another layer: US corn costs under ₹15/kg versus India’s wholesale price of ₹22–23/kg and MSP of ₹24/kg for 2025–26.
• Hence, given domestic sensitivities, India is unlikely to concede, though the US continues to lobby aggressively.